Wednesday, May 20, 2015

My long-term target for the price of gold was $6,300, based on two proprietary calculations, namely research on cycles, money supply figures, and various pricing ratios. They did not take into account QE rounds.

Folks, possessing physical gold is equivalent to having insurance against financial catastrophe. Hence, why would one store it inside financial institutions? The whole concept of owning physical precious metals bullion is to get it OUT of the financial system.

Custodial accounts are fine, depending on the jurisdiction. Switzerland and Singapore come to mind. Banks...not so much.

In fact, I warned of the precarious nature of the FDIC in 2013 in several presentations, and how bank bail-ins are written into laws for most of the developed economies under the thumb of the corrupt BIS. Depositors: you have been warned.

Here was the presentation in 2013. Note the mandate is 1.15% coverage on guaranteed deposits, a dangerously low reserve requirement. And the FDIC doesn't even meet that low threshold.

Thursday, May 14, 2015

Ray Dalio of Bridgewater Associates sounds like a lunatic gold bug in this interview. The problem with that assumption is Bridgewater happens to be the largest hedge fund in the world, with $150 billion of assets under management. Dalio has (Wall Street) credibility and is widely respected.

The venue is also interesting. This interview took place at the powerful and influential Council on Foreign Relations conference. According to conspiracy theorists and the paleoconservative John Birch Society, the CFR is "Guilty of conspiring with others to build a one world government..." The CFR has traditionally been negatively biased against gold, as it poses a threat to fiat currencies. Furthermore, a gold standard hampers central bankers' capability to create unlimited currency units (and credit) out of thin air.

Hence, it is surprising that the CFR gave Dalio the microphone to spread some truth about gold. The powers-that-be must have gone ballistic, as one of their own went off the reservation.

In sum: the IMF paid itself on behalf of Greece and will now be forced to pay itself back for paying itself later this month. Or, put differently, Greece has prepaid the IMF with IMF money it doesnt have.

Friday, May 8, 2015

It’s the news everyone dreads—a call from the hospital. And it’s about one of the most important people in the world…
Your mother.

[Every ALL-CAPS ITEM below contains silver or is required in its use.]

You hear the nurse talking urgently through your TELEPHONE and you realize it’s serious…
You grab your REMOTE CONTROL and turn down the volume on your PLASMA TV
that’s playing your favorite DVD movie. You push the BUTTON and the
SPEAKERS go mute. You press “save” on the KEYBOARD of your COMPUTER.
“Yes, she’s okay,” the nurse tells you. “But you need to come to the HOSPITAL right away.”
That’s all you need to hear. You yell to your spouse and grab your CELLPHONE to call your siblings.
“Is she alright?” your wife asks frantically. She was using the VACUUM
CLEANER and WASHING MACHINE and didn’t hear the conversation.
“Yes, but hurry,” you reply, reaching to turn off the STOVE.
Your wife springs into action—she pushes the TOYS out of the way, grabs
a WATER BOTTLE from the REFRIGERATOR and closes the MICROWAVE door.
You run to the bedroom and put on that new SUNBLOCK SHIRT she got you
and check yourself in the MIRROR. You notice the glint off your SOLAR
PANELS shines brightly through the WINDOW. You’re sweating and are glad
the AIR CONDITIONER and AIR PURIFIER are working.
Your wife opens the LATCH to the front door. You notice she’s wearing
those EARRINGS you got her for Christmas, the ones you put in with the
CD of her favorite singer.
You unlock the car with your REMOTE KEY and rev up the ENGINE. Your
wife opens the POWER WINDOWS while you adjust the POWER SEATS.
You leave the RADIO off, and are impatient at the STOPLIGHT, even
though you can already see the CELLPHONE TOWERS on top of the hospital.
Your wife is talking to your other family members on her CELLPHONE.
You pull up to the toll booth and the SCANNER beeps you through
quickly. Your wife glances at her WATCH, and you remember she needs a
new BATTERY.
You enter the hospital through the AUTOMATIC DOOR and a receptionist
uses an IPAD to give you the room number. The indoor temperature is cool
and you remember reading about the new INSULATION the hospital used in
construction. You quickly push the ELEVATOR BUTTON for the second floor.
You reach the room and there is your mother, lying on a RECLINING BED,
with a BREATHING TUBE in her mouth. She’s connected to NUMEROUS HOSPITAL
DEVICES, some of which display readouts on a COMPUTER SCREEN. You try
not to panic, as you see various SURGICAL INSTRUMENTS lying on a nearby
SILVER tray.
“Your mother is on MEDICATION,” says a doctor walking into the room. He
has a STETHOSCOPE around his neck and EYEGLASSES perched on his nose.
“She fell and sustained some injuries, but she will be okay.” You see
the BANDAGES on her face and arms, and the doctor notices your concern.
“We’ll take some X-RAYS to be sure she didn’t break any bones,” he
says. “And she’s already on ANTIBIOTICS, so we’ll catch any infection
before it starts.”
You take a deep breath of relief as you realize she’ll be okay. You
grasp your mother’s arm and notice she’s still wearing her favorite
BRACELET.
The doctor uses a LAPTOP to update her status. The nurse uses a WATER
PURIFIER to fill the water pitcher and sets it on the ANTI-SCRATCH
surface of the nearby table.
You settle into a PLASTIC CHAIR beside your mother and take a deep, relaxing breath. It then dawns on you just how much…

Silver Is Essential to Modern Life

There are numerous medical examples like this every day, where silver
served a cornerstone purpose to treat a hospital patient. In fact, if
you’ve ever been treated by a doctor or admitted to a hospital, you’ve
been a direct recipient of one or more of the medical benefits of
silver. From simple bandages to life-saving equipment in operating
rooms, silver is quite literally a lifesaving precious metal.
Silver is used in nearly every major industry today, from biocides and electronics to solar panels and batteries. In fact, silver is so embedded in modern life that you do not go one day without using a product made with or by silver. It’s everywhere, even if you don’t see it.
Due to the exponential increase in the number of uses for this precious metal, demand has exploded. Check out silver’s growth…

Jewelry and silverware use is up 27.2% since 2011.

India imported 5,500 tonnes of silver last year, 180% more than just two years ago.

Solar power accounted for 29% of added electricity capacity in America last year. “Eventually solar will become so large that there will be consequences everywhere,” says the US Solar Energy Industries Association.

China’s solar industry is exploding—it represented about 0.2% of the global market in 2009, but last year soared to 17%.

Silver demand in China exceeded a quarter million ounces last year for the first time in history.

New uses for silver continue to be discovered. The latest fashion—a “scough”—uses silver nanoparticles to trap and kill germs and pollutants.

Total industrial demand is projected to increase 5% per year through 2016—and outpace global GDP growth.

In spite of the fall in price, ETF demand soared in 2014, as total holdings exceeded the 2011 record high.

Joe Lavorgna of Deutsche Bank gets paid millions of dollars to consistently apologize for weak economic data by blaming the weather. He's made these rationalizing forecasts at least 21 times in the last couple years. Scroll down.

“People want trophy homes,” Eyal Ofer, a Monaco-based shipping and real
estate magnate, said in interview earlier this week at the Milken
Institute Global Conference in Beverly Hills, California. “They’re a
scarce commodity. And they’re better than gold because you can boast
about it.”

Finance 101: when bond yields (interest rates) rise, bond prices decline. What was considered "safe" will prove to be anything but. Which means banks, insurance carriers and pension funds will be in deep doo-doo.

“The
money powers prey upon the nation in times of peace and conspire
against it in times of adversity. It is more despotic than a monarchy,
more insolent than autocracy, and more selfish than bureaucracy. It
denounces as public enemies, all who question its methods or throw light
upon its crimes. I have two great enemies, the Southern Army in front
of me and the Bankers in the rear. Of the two, the one at my rear is my
greatest foe.”

Lincoln then prophetically added:

“I
see in the near future a crisis approaching that unnerves me and causes
me to tremble for the safety of my Country. Corporations have been
enthroned, an era of corruption in high places will follow, and the
money power of the Country will endeavor to prolong its reign by working
upon the prejudices of the People, until the wealth is aggregated in a
few hands, and the Republic is destroyed.”

There is no solution to the crisis, merely a choice of which roads to
choose, a deflationary debt collapse, or a hyperinflationary dollar
collapse or World War III. Pick your poison...

Finally, we wonder: will the CME, CFTC, DOJ, and FBI pursue as
promptly all those instances of constant S&P 500 manipulation and
spoofing we profiled over the past week in particular,
and over the past 6 years in general? Or was this merely another
"Sarao" case when several (non-Caucasian) traders are scapegoated by the
regulators, with the naive expectation that investors will suddenly
assume the market - in this case that of gold - is no longer rigged?

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Welcome

Some of our best ideas come to us during the most inopportune times: waking up, in the shower, driving along a country road...my blog is an attempt to capture these epiphanies, whether whimsical or serious in nature. These blogs are heavily weighted toward financial matters and/or innovation (e.g. disruptive technology)--normally boring subject matter. But when sprinkled in with meanderings about human nature, I hope to shed some light on oft-misunderstood topics--without being dogmatic. Enjoy and perhaps learn a thing or two from my moments of clarity.

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